What is I-O?

Industrial-organizational (I-O) psychology is the scientific
study of the workplace. Rigor and methods of psychology are
applied to issues of critical relevance to business,
including talent management, coaching, assessment,
selection, training, organizational development,
performance, and work-life balance.

Many organizations fail to take advantage of available employee selection methods that could improve the intellectual capital of their workforce and improve their bottom line results. Although a great deal of research has been conducted on which employee selection methods are the most effective, research on actual employee selection practices is limited, and research on who uses which methods is rare. In a recent study of human resource executives, we found that human resource executives with a degree in either industrial-organizational psychology or human resources and who belong to the Society for Industrial and Organizational Psychology used more sophisticated employee selection methods. Unfortunately, we also found that most of the human resource executives in our study did not possess these characteristics.

The research on actual employee selection practices suggests that a large gap exists between science (what is recommended in scholarly journals) and practice (how people are actually selected for jobs). For example, in a study of 201 companies, Terpstra and Rozelle (1993) found only 29% used structured interviews, only 24% conducted validation studies of their selection methods, only 20% used cognitive ability tests, and only 17% used weighted application blanks or biographical information blanks. In a recent follow up study, Drogan and Yancey (2011) asked the top human resource executives at 122 credit unions about their institutions’ employee selection methods for hiring entry-level employees. According to their study, 72% of the institutions used structured interviews, but only 53% used job analysis when developing their selection tools, only 27% used cognitive ability tests, only 14% conducted validation studies of their selection methods, and only 4% used weighted application blanks or biographical information blanks. Thus, other than the structured interview, many of the suggested techniques for improving the quality of hiring decisions were left unused by many institutions.

To better understand why human resource executives may be hesitant to use employee selection methods with demonstrated effectiveness, Rynes, Colbert, and Brown (2002) found large discrepancies between research findings and practitioners’ beliefs about those findings. The 959 human resource professionals they surveyed were especially skeptical about the ability of intelligence and personality tests to predict future employee performance. The authors also pointed out that such tests can be controversial and upset job applicants, which is another reason human resource professionals may not want to use them.

Rynes, Giluk, and Brown (2007) found that the sources of information from which human resource practitioners learn about their field often fail to disseminate academic research findings. The messages practitioners read are often different from the ones published in academic journals. Thus, not only are human resource practitioners skeptical about research findings, as Rynes et al. (2002) found, many human resource practitioners are also unaware of research findings.

We asked the top human resource executives at 94 credit unions 11 questions about their employee selection practices for entry-level employees to measure their organization’s employee selection sophistication. The affirmative responses to these 11 questions were summed to create an index of employee selection sophistication. This index number was our main criterion variable. The 11 employee selection practices and the percentage of human resource executives whose organizations used each practice are listed in Table 1.

Table 1Percentage Use of Different Employee Selection Practices

Employee selection practice used

Yes

No

1. Interview questions are structured?

94%

6%

2. History check of resume or application?

91.5%

8.5%

3. Different pieces of information about the applicants' experience and education assigned specific weights?

71%

29%

4. Organization uses job analysis information in the development of its selection methods for entry level employees?

64%

36%

5. There is a standard way to evaluate and score each applicant's responses to interview questions?

50%

50%

6. Interviewers receive interview training?

44%

56%

7. Integrity test?

21%

79%

8. Personality test?

13%

87%

9. When hiring entry level employees, does your organization employ strategies to reduce the adverse impact of the decisions?

12%

88%

10. Cognitive ability test?

11%

89%

11. If your organization uses multiple selection methods when hiring entry level employees, is the information from the multiple sources combined in a systematic way to arrive at a single score for each job applicant?

7%

93%

We hypothesized that the better educated human resource executives might be more aware of the more sophisticated employee selection methods because being in school longer might increase their exposure to these methods. For example, an executive with an MBA might have had more human resource classes than an executive with a bachelor’s degree in business. More importantly, executives with more education might be more willing to use and believe in academic research and, therefore, to use it in their professional roles because more education often requires students to take more research classes and read more research articles.

This hypothesis was supported. The correlation between level of education and the number of sophisticated employee selection practices used was moderately strong (r = .38, p < .001). As can be seen in Table 2, the executives with master’s degrees used 1.5 more sophisticated employee selection practices than those with a bachelor’s degree. Although the human resource executives with master’s degrees tended to use all of the sophisticated employee selection practices slightly more often than the human resource executives without master’s degrees, there were three employee selection practices that the former used significantly more often than the latter.

One was the use of cognitive ability tests (χ2(3) = 16.3, p < .01) where 29% of executives with master’s degrees used cognitive ability tests to hire entry-level employees compared to only 2% of the executives without master’s degrees. Another was making sure that interviewers were trained (χ2(3) = 14.2, p < .01) where 71% of executives with master’s degrees required interviewer training for those interviewing applicants compared to only 31% of the executives without master’s degrees. The third practice was building selection methods for entry-level jobs based on job analysis data (χ2(3) = 13.5, p < .01) where 87% of executives with master’s degrees used job analysis data compared to only 53% of the executives without master’s degrees.

We also hypothesized that human resource executives who graduated with an I-O psychology or a human resources degree would be more familiar with the current research in employee selection than other executives because they probably had to take a class that focused on employee selection, and they would have revisited employee selection issues throughout their educational experience. Thus, an executive with an I-O psychology or a human resources degree would probably be more likely to know the advantages and disadvantages of the different selection methods, would know how to use them alone and in combination, and would know which method works best for certain circumstances. Therefore, such an individual would be more comfortable using these methods and more likely to use these methods.

Our second hypothesis was also supported (F(2,90) = 7.3, p < .001). A post hoc Tukey test indicated that human resource executives who graduated with an I-O psychology or a human resources degree used significantly more sophisticated employee selection practices than business majors (p < .01) and nonbusiness majors (p < .01). However, the difference in using sophisticated employee selection practices between business majors and nonbusiness majors was nonsignificant (p > .05). As can be seen in Table 3, the executives with an I-O psychology or human resources degree used 2.1 more practices than those with a business degree.

Although the human resource executives with a degree in either I-O psychology or human resources tended to use all of the sophisticated employee selection practices slightly more often than the human resource executives without a degree in either I-O psychology or human resources, there were three employee selection practices that the former used significantly more often than the latter. One was the use of cognitive ability tests (χ2(2) = 29.0, p < .001), where 54% of executives with a degree in either I-O psychology or human resources used cognitive ability tests to hire entry level employees compared to only 4% of the executives without such a degree. Another was the use of personality tests (χ2(2) = 16.2, p < .001), where 46% of executives with a degree in either I-O psychology or human resources used personality tests to hire entry-level employees compared to only 8% of the executives without such a degree. The third practice was making sure that interviewers were trained (χ2(2) = 14.0, p < .01), where 92% of executives with a degree in either I-O psychology or human resources required interviewer training for those interviewing applicants compared to only 37% of the executives without such a degree.

To obtain a human resource certification, a human resource professional must initially pass a test to be certified. To be allowed to take the test, he or she needs to have worked in human resources for a certain period of time. Afterwards, to retain one’s human resource certification, a human resource professional must engage in continuing education to get recertified periodically. Because obtaining and keeping a human resource certification requires a human resource executive to continuously invest in his or her education, we felt that these executives would have more human resource knowledge. Thus, they would probably be more familiar with the more effective selection practices, know how to use them, and be more likely to use them.

Our third hypothesis was not supported. The human resource executives with a SHRM certification (M = 5.4, SD = 2.58) did use about one more sophisticated employee selection practice than did human resource executives without a certification (M = 4.6, SD = 1.84); however, this was not enough to support the hypothesis (I(94) = 2.98, p = .09). Seventeen percent of the human resource executives in our study had some kind of SHRM certification, and 83% did not. Perhaps the executives were aware of the limited value of being certified by SHRM.

We felt that human resource executives who belong to a national level human resource-related professional organization, such as SHRM or SIOP, would have more opportunities to keep up with the trends of academic research because of the conferences and publications membership makes available. Thus, he or she would probably know more about the most effective selection practices and be more likely to use them.

Our fourth hypothesis was somewhat supported (F(2,91) = 3.56, p < .05). A post hoc Tukey test indicated that the human resource executives who belonged to SIOP (M = 7.0, SD = 3.67) used more sophisticated employee selection practices than those who did not belong to any professional organization (M = 4.6, SD = 1.66, p < .05). There was no significant difference between human resource executives who belonged to SIOP and human resource executives who belonged to SHRM (M = 4.8, SD = 2.38, p = .08). In addition, no significant difference was found between human resource executives who belonged to SHRM and human resource executives who did not belong to any organization (p > .05). Although these results point to the advantage of belonging to SIOP, only 5% of the human resource executives in our study belonged to SIOP. Eighteen percent belonged to SHRM and 77% did not belong to any national level human resources professional organization.

Because larger organizations have more employees, their top human resource executive is usually paid more. For more pay, an organization can attract a human resource executive with better education and experience. In addition, larger organizations usually have human resource departments with more employees and bigger budgets. With more money, the larger organizations can spend more on employee selection practices. With more employees, the larger human resource departments can hire specialists who focus on staffing, training, or compensation. Therefore, we thought the larger organizations would be more likely to have human resource executives and human resource staffing specialists who know more about the sophisticated employee selection practices. In addition, the larger organizations would also have the resources to use these practices. This hypothesis was not supported (r = .09, p < .05). The larger organizations did not use significantly more sophisticated employee selection practices than the smaller organizations. The average number of full-time employees at these institutions was 172 (SD = 388).

This study’s correlational design severely limits its ability to make causal inferences. The convenience sample of human resource executives from the credit union industry severely limits the generalizability of the findings. Given those large limitations, we humbly put forth a few potential implications from our study.

As has been written many times before, I-O psychologists and human resource experts working in academia need to disseminate their employee selection knowledge to publications that are read by human resource practitioners, such as HR Magazine, and not just to academic publications. They need to speak at practitioner venues such as the SHRM conference. These efforts might help correct some of the misbeliefs held by human resource practitioners that Rynes et al. (2002) reported.

In addition, I-O psychologists and human resource experts need to communicate to CEOs that their well-paid human resource executive may not be as well educated in human resource management as he or she could be. One of the ways an I-O psychologist or human resource consultant could have a long lasting impact on improving the employee selection practices of businesses would be to help organizations select or promote individuals into the top human resource executive position who are more knowledgeable about effective human resource practices, such as employee selection.

For human resource executives with little formal training in human resources, an investment in an I-O psychology or human resources master’s degree might yield rich dividends for their organizations.